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Molly McCluskey covers banking and international markets. For Daily Finance, she writes on personal finance, consumer advocacy and smarter ways to travel. Her work has also appeared in Washingtonian Magazine, the Washington Post, and others. When not traveling, Molly is based in Washington D.C. Follow her on Twitter @MollyEMcCluskey or on Facebook.

In December, an elderly Kansas man was contacted by fraudsters posing as Bank of America (BAC) employees. They claimed his home was near foreclosure. Two months later, after he granted the con men access to his financial information, they made off with $110,000 of his money.

More than five years have passed since the mortgage bubble began to pop, and scammers taking advantage of homeowners still abound. And the criminals have become increasingly sophisticated, sometimes posing as legitimate government agencies offering mortgage relief programs, or as representatives of mortgage companies themselves.

An example of that last variety of con was busted in Michigan recently, when state officials shut down a "mortgage company" whose sole business activity was operating a website intended to commit financial and identity theft.

Creative Lending

Housing fraud was especially prevalent both before and during the housing crisis. In 2008, predatory lenders targeted low-income individuals with a wide variety of creative mortgage options.

In 2010, one in every 248 households received an often improper and occasionally illegal foreclosure notice, many of which had been "robo-signed" by bank representatives who failed to review the paperwork. Some were for homes that had been purchased either without a mortgage, or with a mortgage from a bank other than the one that foreclosed them; other foreclosures moved forward on homes that weren't the intended targets.

Just last year, according to the Consumer Financial Protection Bureau, the two largest scams bilked struggling homeowners out of more than $10 million in fees after promising to save their homes from foreclosures or troubled mortgages.

The two companies implicated in these schemes -- the Gordon Law Firm and the National Legal Help Center -- have had their assets frozen while investigations moves forward. The companies allegedly promised assistance with obtaining relief via government programs, and used governmental logos, letterhead and symbols to cloak their scams in the appearance of legitimacy.

Heed the warning signs

Although fraudsters are adapting quickly, and often change their methods the moment they're detected, the CFPB says there are several consistent red flags.

Homeowners should avoid mortgage relief programs that tell them to stop making payments, or to make payments to an entity other than the loan provider. Be wary of any entity that charges steep up-front fees for its services. Also, any program that asks for the property title to be signed over, or pushes a speedy signing of any paperwork, regardless of whether or not the homeowner understands it, is most likely fraudulent.

Ongoing Reformation

In January the CFPB released new rules to ban predatory lending by banks to high-risk individuals. Some of the practices mentioned specifically are interest-only and no-documentation loans.

Under the new rules, lenders will have to pay further attention to borrowers' financial records, including insuring that their total debt payments don't exceed 43 percent of the person's annual income. Under the new rules, all loan and credit card payments will be factored in.

The rules are meant to even out the seesaw effect of the past few years, when first poorly qualified individuals were able to obtain easy mortgages, then, as a result of the subsequent foreclosures, highly qualified individuals were unable to obtain loans.

An Uphill Battle

Because there are many aspects of the mortgage industry that are under scrutiny and/or in recovery, it will be quite some time before lenders and borrowers are both operating on even footing. Until then, the potential for scams and schemes remains large.

Troubled homeowners who need help or suspect they've been the target of fraud should reach out directly to authorized government agencies, and not rely on marketing literature, ads, or other outreach through questionable sources. The CFPB offers a variety of help and information for homeowners, including access to a free Housing and Urban Development-approved counselor.

You can follow Motley Fool contributor Molly McCluskey on Twitter @MollyEMcCluskey. The Motley Fool owns shares of Bank of America.

teapartyisstupid Instead of having.......In God We Trust..........on our currency it should say...........In Evil We Trust.

===================================================If that change does happen, our currency should also include a picture of Obama on the 1 dollar bill, Pelosi on the 5 dollar bill, and Reid on the 10 dollar bill.

We live in Florida and unfortunately are one of the many homes underwater. We tend to get "notifications" from what looks to be our mortgage bank about once a week soliciting a refinance. When examining the letters we see only references to our mortgage bank and many times it is hard to figure out who is actually sending the letters. I'm sure they can't wait to get our personal information and unfortunately I'm sure there are those who give it to them. The best thing you can do if foreclosure might be in your future is consult an attorney about your options and protect yourself as much as you can...and I'm not a lawyer.